The Supreme Court has ruled in a majority decision that a one of the two men who stole 96 gallantry medals from the National Army Museum can keep his $100,000 reward for returning the medals.

James Kapa is serving a 13-year sentence for his crime. On December 2, 2007, he and Ronald Van Wakeren burgled the museum at Waiouru and stole the medals, which included nine Victoria Crosses.

On December 17, the police commissioner offered a reward - funded by British peer Michael Ashcroft and Nelson businessman Tom Sturgess - for evidence leading to the identity and conviction of the thieves or the recovery of the stolen medals.

In January, 2008, lawyer Christopher Comeskey offered the police a deal in which the medals were returned for the reward. He did not reveal his clients were Kapa and van Wakeren.

The medals were returned in February 2008 and the two thieves received $100,000 each. When they were arrested, van Wakeren returned his share but Kapa did not.

A District Court judge ordered Kapa to pay $100,000 reparation and the Court of Appeal dismissed an appeal against that.

But the Supreme Court in a decision released today ruled that only victims could be the recipients of a sentence of reparation - and Ashcroft and Sturgess were not victims.

However, Chief Justice Dame Sian Elias and Justices John McGrath, William Young and Robert Chambers did say there was another way in which Kapa could be stripped of his gain.

An action could still be brought under the Criminal Proceeds (Recovery) Act, they said.

In a minority opinion, Justice Susan Glazebrook said she would have allowed the appeal, because under her interpretation of legislation, Ashcroft and Sturgess were victims, through suffering either direct or consequential loss.